Singapore overtakes Tokyo as costliest city in world: report

AFP, SINGAPORE

Wed, Mar 05, 2014 - Page 15

The soaring cost of cars and utilities, as well as a strong currency, have seen Singapore topple Tokyo to become the world’s most expensive city, a survey by the Economist Intelligence Unit showed yesterday.

The weakening yen saw the Japanese capital slide to sixth place — the position previously occupied by Singapore — in this year’s Worldwide Cost of Living report.

“Singapore’s rising price prominence has been steady rather than spectacular,” a report accompanying the survey said.

The report said that a 40 percent rise in the Singapore dollar, coupled with “solid price inflation,” had pushed the city-state to the top of the biannual survey from 18th place a decade ago.

The survey, which examines the prices of 160 products and services in 140 cities, is aimed at helping companies calculate allowances for executives being sent overseas.

The report said Singapore’s curbs on car ownership, which include a quota system and high taxes, made it “significantly more expensive than any other location when it comes to running a car.”

“In addition, as a city-state with very few natural resources to speak of, Singapore is reliant on other countries for energy and water supplies, making it the third most expensive destination for utility costs,” it added.

Singapore has one of the world’s highest concentrations of millionaires relative to its 5.4 million population and its per capita income of more than US$51,000 in 2012 masks a widening income gap between the richest and poorest, data show.

Among European cities, Paris rose six places to become the world’s second-most expensive city, a trend the research unit said was indicative of recovering prices and currencies in the region.

“Improving sentiment in structurally expensive European cities combined with the continued rise of Asian hubs means that these two regions continue to supply most of the world’s most expensive cities,” report editor Jon Copestake said in a statement.

The report said European cities were among the priciest in the recreation and entertainment categories, reflecting “a greater premium on discretionary income.”

New York, which serves as the survey’s base city, was ranked 26th, while Sydney and Melbourne came in at fifth and sixth respectively, owing to a strong Australian dollar.

Caracas was tied at sixth with Melbourne, Geneva and Tokyo, but the EIU said the Venezuelan capital’s position was largely due to the imposition of an artificially high official exchange rate.

“If alternative black market rates were applied, Caracas would comfortably become the world’s cheapest city in which to live,” the report showed.

India’s financial hub of Mumbai was ranked as the world’s least expensive city, joining other South Asian cities including Karachi in Pakistan, New Delhi and Kathmandu in the bottom of the pile.

After Singapore, the world’s most expensive cities were: Paris, Oslo, Zurich and Sydney in descending order, with Copenhangen coming in 10th place, according to the report.